Office of Fair Trading and others v IBA Health Limited: CA 19 Feb 2004

The OFT had considered whether it was necessary to refer a merger between two companies to the Competition Commission, and decided against. The Competition Appeal Tribunal held that the proposed merger should have been referred. The OFT and parties appealed.
Held: The Tribunal had misdirected itself as to one test. The statutory test required the OFT to believe that the merger ‘may be’ expected to result in a substantial lessening in competition, not that such a belief might arise in the future. On the other hand, the OFT had first to form a relevant belief – a suspicion was insufficient. That belief must be reasonable and objectively based. The degree of likelihood expected must amount to an expectation that ‘it is or may be the case that’ the merger may be a ‘relevant merger’ for the Act.
Carnwath LJ said: ‘the CAT was right to observe that their approach should reflect the ‘specific context’ in which they had been created as a specialised tribunal (paras 220); but they were wrong to suggest that this permitted them to discard established case law relating to ‘reasonableness’ in administrative law, in favour of the ‘ordinary and natural meaning’ of that word (para 225). Their instinctive wish for a more flexible approach than Wednesbury would have found more solid support in the textbook discussions of the subject, which emphasise the flexibility of the legal concept of ‘reasonableness’ dependent on the statutory context (see de Smith para 13-055ff ‘The intensity of review’; cf Wade and Forsyth, p 364ff ‘The standard of reasonableness’, and the comments of Lord Lowry in R v Secretary of State for the Home Department, Ex p Brind [1991] 1 AC 696, 765ff).
Thus, at one end of the spectrum, a ‘low intensity’ of review is applied to cases involving issues ‘depending essentially on political judgment’ (de Smith para 13-056-7). Examples are R v Secretary of State, Ex p Nottinghamshire County Council [1986] AC 240, and R v Secretary of State, Ex p Hammersmith and Fulham London Borough Council [1991] 1 AC 521, where the decisions related to a matter of national economic policy, and the court would not intervene outside of ‘the extremes of bad faith, improper motive or manifest absurdity’ ([1991] 1 AC, per Lord Bridge of Harwich, at pp 596-597). At the other end of the spectrum are decisions infringing fundamental rights where unreasonableness is not equated with ‘absurdity’ or ‘perversity’, and a ‘lower’ threshold of unreasonableness is used . . A further factor relevant to the intensity of review is whether the issue before the Tribunal is one properly within the province of the court. As has often been said, judges are not ‘equipped by training or experience or furnished with the requisite knowledge or advice’ to decide issues depending on administrative or political judgment: see Ex p Brind [1991] 1 AC at 767, per Lord Lowry. On the other hand where the question is the fairness of a procedure adopted by a decision-maker, the court has been more willing to intervene: such questions are to be answered not by reference to Wednesbury unreasonableness, but ‘in accordance with the principles of fair procedure which have been developed over the years and of which the courts are the author and sole judge” (R v Panel on Take-overs and Mergers, Ex p Guinness plc [1990] 1 QB 146, 184, per Lloyd LJ).’


Lord Justice Mance VC, Lord Justice Carnwath


[2004] EWCA Civ 142, Times 25-Feb-2004, Gazette 18-Mar-2004, [2004] 4 All ER 1103, [2004] ICR 1364




Enterprise Act 2002 33(1)


England and Wales


CitedAssociated Provincial Picture Houses Ltd v Wednesbury Corporation CA 10-Nov-1947
Administrative Discretion to be Used Reasonably
The applicant challenged the manner of decision making as to the conditions which had been attached to its licence to open the cinema on Sundays. It had not been allowed to admit children under 15 years of age. The statute provided no appeal . .
CitedPadfield v Minister of Agriculture, Fisheries and Food HL 14-Feb-1968
Exercise of Ministerial Discretion
The Minister had power to direct an investigation in respect of any complaint as to the operation of any marketing scheme for agricultural produce. Milk producers complained about the price paid by the milk marketing board for their milk when . .
CitedSecretary of State for Education and Science v Tameside Metropolitan Borough Council HL 21-Oct-1976
An authority investigating an application for registration of rights of common over land has an implied duty to ‘take reasonable steps to acquaint (itself) with the relevant information.’ A mere factual mistake has become a ground of judicial . .
CitedRegina v Monopolies and Mergers Commission, ex parte Argyll Group plc CA 14-Mar-1986
Weighing Interest of Seeker of Judicial Review
The court recast in simpler language the provision in section 75 empowering the Secretary of State to make a merger reference to the Commission: ‘where it appears to him that it is or may be the fact that arrangements are in progress or in . .
CitedRegina (Daly) v Secretary of State for the Home Department HL 23-May-2001
A prison policy requiring prisoners not to be present when their property was searched and their mail was examined was unlawful. The policy had been introduced after failures in search procedures where officers had been intimidated by the presence . .
CitedRegina v Monopolies and Mergers Commission, ex parte South Yorkshire Transport Ltd HL 1993
One bus company took over another, giving it an effective monopoly within the region. The Commission considered that the area involved was sufficiently substantial to cause concern that it may operate against the public interest. At first instance . .
CitedEdwards (Inspector of Taxes) v Bairstow HL 25-Jul-1955
The House was asked whether a particular transaction was ‘an adventure in the nature of trade’.
Held: Although the House accepted that this was ‘an inference of fact’, on the primary facts as found by the Commissioners ‘the true and only . .
CitedRegina v Hillingdon London Borough Council Ex parte Puhlhofer HL 2-Jan-1986
Not Homeless Even if Accomodation Inadequate
The applicants, a married couple, lived with a young child and later also a baby in one room of a guest house. They were given breakfast but had no cooking or washing facilities. They succeeded on a judicial review of the housing authority’s . .
CitedRegina v Secretary of State for the Environment, ex parte Nottinghamshire County Council HL 12-Dec-1985
The House heard a judicial review of the Secretary of State’s assessment of the proper level of expenditure by a local authority.
Held: A ‘low intensity’ of review is applied to cases involving issues ‘depending essentially on political . .
CitedRegina v Secretary of State for the Home Department ex parte Brind HL 7-Feb-1991
The Home Secretary had issued directives to the BBC and IBA prohibiting the broadcasting of speech by representatives of proscribed terrorist organisations. The applicant journalists challenged the legality of the directives on the ground that they . .
CitedCouncil of Civil Service Unions v Minister for the Civil Service HL 22-Nov-1984
Exercise of Prerogative Power is Reviewable
The House considered an executive decision made pursuant to powers conferred by a prerogative order. The Minister had ordered employees at GCHQ not to be members of trades unions.
Held: The exercise of a prerogative power of a public nature . .
CitedRegina v Panel on Takeovers and Mergers ex parte Guinness Plc CA 1989
The court asked about the standard of decision making at which a court could intervene: ‘Irrationality, at least in the sense of failing to take account of relevant factors or taking account of irrelevant factors, is a difficult concept in the . .
CitedRe Poyser and Mills’ Arbitration 1963
The section at issue imposed a duty upon a tribunal to which the Act applies or any minister who makes a decision after the holding of a statutory inquiry to give reasons for their decision, if requested. A record of the reasons for a decision must . .
CitedRegina v Lancashire County Council ex parte Huddleston CA 1986
The respondent council had failed to allocate a university student grant to the claimant and the principle was directed at the duty of that authority to state clearly the reasons for its refusal and the particular factors that had been taken into . .
CitedRegina v Director General of Telecommunications, Ex P Cellcom Ltd and others QBD 7-Dec-1998
The Director General of Telecommunications can quite properly use his powers and discretion to ensure competition in telecommunications by the granting and withholding of licences. He may take account of economic factors in making such a decision. . .
CitedMoyna v Secretary of State for Work and Pensions HL 31-Jul-2003
The appellant had applied for and been refused disability living allowance on the basis of being able to carry out certain cooking tasks.
Held: The purpose of the ‘cooking test’ is not to ascertain whether the applicant can survive, or enjoy a . .

Cited by:

CitedT-Mobile (Uk) Ltd. and Another v Office of Communications CA 12-Dec-2008
The claimant telecoms companies objected to a proposed scheme for future licensing of available spectrum. The scheme anticipated a bias in favour of auctioniung such content. It was not agreed whether any challenge to the decision should be by way . .
CitedKennedy v The Charity Commission SC 26-Mar-2014
The claimant journalist sought disclosure of papers acquired by the respondent in its conduct of enquiries into the charitable Mariam appeal. The Commission referred to an absolute exemption under section 32(2) of the 2000 Act, saying that the . .
Lists of cited by and citing cases may be incomplete.

Company, Commercial

Updated: 26 November 2022; Ref: scu.193916